Chris Lowery v. State of Illinois

ORDER

BURNS, J.

This matter comes before the Court on the Respondent's Motion to Dismiss pursuant to Section 2-619.1 of the Illinois Code of Civil Procedure. 735 ILCS 2-619.1. The Claimant filed his Objections. Oral arguments took place on September 22, 2014. The Court having read the pleadings and transcript and being fully advised in the premises finds:

FACTS

The Claimant was the men’s basketball coach at Southern Illinois University (“SIU”) from 2007 to 2012. On August 16, 2013, the Claimant filed a Complaint in this Court against the Respondent for breach of contract (Count I) and defamation (Count II) arising out of the Claimant's firing that occurred on March 1, 2012. At the time of his firing, the Claimant had two years and $1.5 million left on the contract.

In July 2012, the Claimant sought to challenge the Respondent's refusal to pay him for the last two years on the contract, as well as the alleged defamation, by filing for arbitration pursuant to an arbitration clause in the contract that expressly stated that “all disputes” arising out of the contract would be resolved by final and binding arbitration. According to the Complaint, the Respondent demanded that the Claimant file his claims with the arbitrator and did not object to arbitration upon receiving the Claimant's demand. The parties then undertook discovery.

In June 2013, however, the Respondent, without prior notice to the Claimant, moved for summary judgment of the defamation claim on the grounds that a tort claim against the Respondent was subject to the exclusive jurisdiction of the Court of Claims.1 The arbitrator denied the Respondent's motion, noting SIU’s failure to exercise diligence in asserting its exclusive jurisdiction argument. In his written order, the arbitrator also noted the potential unfairness to the Claimant were he to lose his defamation claim due to statute of limitations under such circumstances. Accordingly, the arbitrator retained jurisdiction over the matter and put a stay on the case pending a determination of the Claimant's claims by this Court.

According to the Complaint, the Respondent did not include the breach of contract claim in its Motion for

Summary Judgment in the arbitration proceeding. However, the Respondent later acknowledged, in response to an

interrogatory, that the breach claim would also be subject to the exclusive jurisdiction of the Court of Claims.

[*103] On August 16, 2013, the Claimant filed his Complaint in this Court.

On October 15, 2013, the Respondent filed its Motion to Dismiss on the following grounds: (1) the Claimant's defamation claim is barred by the statute of limitations; (2) the Claimant failed to exhaust his administrative remedies; (3) the Claimant failed to comply with various pleading requirements; (4) the Claimant's request for attorney’s fees should be stricken; (5) the Claimant's prayer for punitive damages should not be allowed; and (6) the Claimant's request for pre-judgment interest should be stricken.

ANALYSIS

As a preliminary matter, we note that neither party disputes that the Court of Claims has jurisdiction over these claims. Section 8(b) of the Court of Claims Act (the “Act”) states that the Court shall have exclusive jurisdiction to hear “all claims against the State founded upon any contract entered into with the State of Illinois.” 705 ILCS 505/8(b). Section 8(d) of the Act states that the Court shall have exclusive jurisdiction over “all claims against the State for damages in cases sounding in tort, if a like cause of action would lie against a private person or corporation in a civil suit, and all like claims sounding in tort against…the Board of Trustees of Southern Illinois University…” 705 ILCS 505/8(d). This Court has previously held that this grant of exclusive jurisdiction over contract and tort claims against the State cannot be waived by the parties and that arbitration is not available as a substitute. National Railroad Passenger Corporation v. State, 36 Ill. Ct. Cl. 265, 268 (1982), petition for rehearing denied (1983). We hold, therefore, that the arbitration clause at issue was invalid and that this Court has jurisdiction over both claims set forth in the Complaint.

Turning to the Motion to Dismiss, we find that Count II of the Complaint must be dismissed for failure to meet the applicable statute of limitations for a defamation claim. Count I of the Complaint may proceed, but we will grant the Respondent's motion to strike certain portions of the Complaint. We address each of the Respondent's arguments for dismissal as follows:

Statute of Limitations

In Illinois, an action for defamation must be filed within one year next after the cause of action accrues. Sarpolis v. Board of Trustees of the University of Illinois, 52 Ill. Ct. Cl. 390 (2000). The Illinois Supreme Court has held that under appropriate circumstances a tolling doctrine may apply to allow a plaintiff’s filing of a claim beyond the applicable statute of limitations. Clay v. Brother Richard Kuhl, 189 Ill. 2d 603 (2000). Such equitable tolling of a statute of limitations may be appropriate where: (1) a defendant has actively misled the plaintiff; or (2) the plaintiff has been prevented from asserting his or her rights in some extraordinary way, or (3) the plaintiff has mistakenly asserted his or her rights in the wrong forum. Id., citing Ciers v. O.L. Schmidt Barge Lines, Inc., 285 Ill. App. 3d 1046 (1996). While equitable tolling is recognized in Illinois, it is rarely applied. The Supreme Court has applied it once, in Williams v. Board of Review, 241 Ill. 2d 352, 360, 350 Ill. Dec. 281, 948 N.E.2d 561 (2011), a case in which it applied federal law. Am. Family Mut. Ins. Co. v. Plunkett, 2014 IL App (1st) 131631.

[*104] In the instant matter, the Claimant acknowledges that he did not file his claim in this Court until August 16, 2013, more than a year after the alleged incidents of April 2012 that gave rise to his claims. However, Claimant asks the Court to apply equitable tolling. Claimant argues that the Respondent actively misled the Claimant into believing that the Claimant had to go to binding arbitration to resolve these disputes. Claimant notes that the Respondent, as an instrumentality of the State of Illinois, was presumably aware of whether it could arbitrate claims that it had committed contractually to arbitrate, and yet it demanded that the Claimant arbitrate, rather than litigate such claims. Furthermore, Claimant points out that the arbitrator noted in his written order dismissing SIU’s motion for summary judgment the potential unfairness to the Claimant in the Respondent having waited until just after the one-year statute of limitations period had expired to raise the jurisdictional issue.

In National Railroad, supra, a case that also involved a contract dispute that went to arbitration pursuant to an arbitration clause, this Court declined to consider the claimant's arguments for equitable tolling on grounds that the legislature did not grant the Court of Claims equitable powers. National Railroad Passenger Corporation v. State, 36 Ill. Ct. Cl. 265, 268 (1982), petition for rehearing denied (1983). In Sarpolis v. Board of Trustees of the University of Illinois, 52 Ill. Ct. Cl. 390 (2000), however, the Court implicitly held that it could apply equitable tolling to a defamation claim. We agree with Sarpolis that the Court does possess the authority to apply equitable doctrines, as opposed to equitable remedies, and therefore, may consider the Claimant's argument for equitable tolling.

Unfortunately for the Claimant, however, he has not convinced us that equitable tolling should be applied in this case. Though the Claimant may have been led to believe arbitration was the sole remedy available, the Claimant acknowledged at oral argument that he could have filed his claim in this Court and then sought a general continuance, as allowed by Court of Claims Rules. We note as well that arbitration clause at issue here covered “all disputes between [the parties] arising out of” the contract, which arguably would not have included the defamation claim. We decline, therefore, to apply equitable tolling in this case, and find that the Count II defamation claim must be dismissed for failure to satisfy the applicable one-year statute of limitations.

Failure to Exhaust Remedies

The Respondent next argues that Count I of the Complaint, for breach of contract, must be dismissed as well because the Claimant failed to exhaust his available remedies. The Respondent notes that the Court of Claims Act and Rules require a claimant to exhaust all administrative remedies and sources of recovery before seeking final resolution of a claim in this Court, and that failure to do so requires dismissal of the claim. The Respondent states that the contract between the parties contained a provision that allowed the Claimant “such procedural rights as are generally applicable to SIU’s employees at a comparable level and to members of the [Athletic] Department in comparable positions.” Since the Claimant did not avail himself of a University grievance process procedure for review of termination decisions, Respondent argues, the Claimant's claims must be dismissed.

[*105] Section 25 of the Court of Claims Act states that any person who files a claim in the court shall, before seeking final determination of his or her claim, exhaust all other remedies and sources of recovery whether administrative or judicial. 705 ILCS 505/25. Section 790.60 of the Court of Claims Rules adopts this legislation but adds the proviso that “no frivolous or unreasonable action is required to be brought against any third party in order to comply with this exhaustion of remedies requirement.” 74 Ill. Admin. Code 790.60. The rule also provides a means by which a claimant can file a claim in this court and then obtain a general continuance while he satisfies the Section 25 exhaustion requirements. Id.

This Court has consistently held that the Section 25 requirements are mandatory and grounds for dismissal. Lyons v. State, 34 Ill. Ct. Cl. 268 (1980). We also have a long history of summarily rejecting claims filed by those who have failed to fully pursue their remedies elsewhere, even when employment issues were at stake. Devaney v. State, 48 Ill. Ct. Cl. 461 (1996). However, we also have held that a claimant need not pursue a particular remedy where there are no facts in the record to indicate that a favorable result would be possible. Tunk v. State, 40 Ill. Ct. Cl. 1, 2 (1998) (“A remedy is a favorable result, not the process or means of seeking a result, or an unsupported theory of action.”)

Here, the Complaint claims that the parties had a contract that expressly stated that arbitration was the sole and exclusive remedy available. A reasonable trier of fact could well determine that the Claimant had no other administrative remedy available to him. The contract provision cited by the Respondent does not indicate otherwise, as it refers to general “procedural rights” available to employees without mention of any grievance process. We also note the Claimant's claim that the Respondent never raised the availability of a grievance process prior to, or during, the arbitration process.

Just as significant, we find no reason to believe a favorable result would have been possible to the Claimant in this matter. The Respondent's Motion to Dismiss pleads no specifics regarding the grievance process that was purportedly available to the Claimant and how it could be used by the Claimant to exact a favorable result. The Respondent had fired the Claimant on March 1, 2012, issued a press release announcing the firing, and then affirmed the firing with a letter sent to the Claimant on March 31, 2012. Given the nature of the position here, a highprofile men’s basketball coach at a major university, we do not think it reasonable to believe that a grievance process would have resulted in the Claimant getting his job back. Nor do we believe the grievance process would have resulted in any award for damages, as the Respondent has acknowledged that no award for damages would be enforceable unless it comes from this Court.

For the foregoing reasons, and construing all the facts and exhibits in the Claimant's favor, we find that the Claimant has exhausted his available administrative remedies by pursuing arbitration as directed by the contract. As such, the Respondent’s Motion to Dismiss for failure to exhaust remedies is denied and Count I may proceed.

Inadequate Pleading

Third, the Respondent argues that the Claimant has failed to comply with the pleading requirements set forth by the Code of Civil Procedure, Illinois Supreme Court Rules and Court of [*106] Claims Rules. Specifically, the Respondent states that (1) the Claimant improperly pleads evidence and not ultimate facts by attaching copies of newspaper articles and deposition testimony to his Complaint; (2) the Claimant failed to comply with this Court’s notice requirement, as set forth in Section 22-1 for the Court of Claims Act, for the defamation claim; and (3) Claimant's Complaint fails to set forth a bill of particulars for his damages. Accordingly, the Respondent asks the Court to dismiss the Complaint pursuant to Section 2-615

In terms of the pleading requirements, we find the Claimant's attachment of the newspaper articles and exhibits in this case to be within the bounds of the Code and Rules. We will not, therefore, require the Claimant to amend his complaint. The Respondent's motion to dismiss the defamation claim based on lack of notice is moot, given that we have already dismissed the count on statute of limitations grounds. As for the bill of particulars, the Claimant disputes that it is inadequate, but asks for the Court to allow him to amend his pleading to set out in greater detail his alleged damages. We, therefore, will grant the Respondent's request to strike the Bill of Particulars in the Complaint and allow the Claimant thirty (30) days to file an amended Bill of Particulars.

Attorney’s Fees

Fourth, the Respondent argues that the Claimant's requests for attorney’s fees should be stricken. Respondent states that Illinois follows the “American Rule,” under which parties must bear their own attorney fees and costs and, absent a statute or agreement to the contrary, may not recover those fees and costs from an adversary. Since the employment contract in this action does not provide for a prevailing party to recover attorney’s fees, and there is no statutory provision that allows recovery of attorney’s fees in this case, the Respondent argues that this Court should strike this portion of the Complaint.

In his Objections, the Claimant acknowledges Illinois’ application of the “American Rule” in litigation and accordingly withdraws his request for recovery of fees incurred in prosecuting this action. The Claimant argues nonetheless that he is still entitled to recover attorney’s fees in the form of damages for costs unnecessarily incurred in the arbitration process as a result of the alleged breach of contract. In Illinois, attorney fees and costs incurred as a result of defendant’s conduct may be awarded as a form of damages. Duignan v. Lincoln Towers Insurance Agency, Inc., 282 Ill. App. 3d 262, 268 (1996). Thus, we will allow the Claimant to include those fees and costs as damages on his Bill of Particulars while granting the Respondent's motion to strike the Claimant's request for attorney’s fees in this action.

Punitive Damages, Pre-judgment Interest

Finally, the Respondent argues punitive damages and pre-judgment interest are not available under Illinois law or Court of Claims precedent. In his Objections, the Claimant does not contest. We, therefore, grant the Respondent's motion to strike Claimant's requests for punitive damages and pre-judgment interest.

[*107] For the foregoing reasons, IT IS HEREBY ORDERED that:

1. The Respondent's Motion to Dismiss is DENIED as to Count I of the Complaint; 2. The Respondent's Motion to Dismiss is GRANTED with prejudice as to Count II of the

Complaint; 3. The Respondent's Motion to Strike is GRANTED as to the Claimant's claims for

attorney’s fees, punitive damages and pre-judgment interest; and 4. The Claimant shall be given thirty (30) days to file an amended Bill of Particulars.